negotiation

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negotiation

the process by which two or more parties attempt to achieve agreement on matters of mutual interest. It can occur at the interpersonal level, for example, to resolve who does the washing-up on a particular evening; or at the organizational and societal level, for example, negotiations between TRADE UNIONS and employers over the size of an annual pay award (see COLLECTIVE BARGAINING). It can be viewed as a way of resolving CONFLICTS of interest in a way that is at least acceptable, if not ideal, to all concerned. Negotiation between two parties can be relatively straightforward but becomes much more complex when more are involved.

Research into negotiation has established that the process works most smoothly when each party listens fully to the other so that the points of difference can be delineated precisely. In many cases this does not happen, with the result that each party's view of the other's position is in fact erroneous. Listening is also essential during hard bargaining to pick up any signals that the other party is prepared to change its bargaining position.

Inexperienced negotiators often believe that negotiation is a zero-sum activity: that one party's gain must be the other's loss. However, such an outcome is rarely effective in the long term. The defeated party may well harbour such resentment that when it is in a more favourable position it will strike back. More experienced negotiators tend to view bargaining as a positive-sum activity: all parties can gain something from the process. Negotiation is the activity through which the possibilities are explored. However in some cases, during INDUSTRIAL DISPUTES for example, negotiators find it impossible to reach agreement. At this point it can be useful to enlist the services of a neutral third party to conduct ARBITRATION, CONCILIATION or MEDIATION.

negotiation

(1) Under the Uniform Commercial Code, it is a voluntary or involuntary transfer of possession of a negotiable instrument by someone other than the issuer, to another, who thereby becomes a holder.(2) More commonly,it is the art and science of bringing two or more parties to an agreement that each views as delivering at least some of his or her goals.

When negotiating in real estate, keep some of these thoughts in mind:

• Price and terms (amount of earnest money, contingencies, time to close, what personal property stays behind, seller financing, etc.) are like two ends of a street. The closer you get to one, such as the price you want to pay, the further you are away from the other, such as the ability to also obtain seller financing. (Common wisdom says you can negotiate price or terms, but not both. That is not true, but they do tend to have an impact on each other.)

• The better armed you are with facts, the more likely you will succeed in your negotiations. If you think a price is too high, be prepared to give examples of similar properties that sold recently for lower prices. You may learn about features making the subject property more valuable. The seller may drop the price. You may find that, while you think the price is high, it is actually below market compared to similar properties.

• In commercial lease negotiations, there is always a certain amount of money the landlord is willing to spend—the deal money. It might be spent in the way of rent concessions, renovation of the leased property, or real estate commissions. Rent concessions consist of free rent for some time or reduced rent for the entire time. Free or reduced rent that is paid back later in the lease is not a true rent concession and shouldn't reduce the amount of available deal money. Learning about other rent concessions in the marketplace, and the amount of leasing commissions typically paid by a particular landlord, will give you a good idea of how to calculate the deal money. (The easiest negotiation in leasing is to tell the landlord how you want the deal money spent. After that, the measure of a good negotiator is how much more you can get.)

• Learn everything you can about the person or company on the other side. Negotiation is not always about reaching an agreement on price. Many times it is discovering and meeting unspoken goals or needs of the other party.

• Don't bid against yourself. If your offer is rejected, wait for a counteroffer.

• Never be embarrassed by a low offer if you think that's what the property is worth. It is far more common than you would think for properties to have asking prices well above what the owners are willing to accept. See bottom-fishing.

• In negotiations over specific wording of a written contract or lease, draw a red “X” on the first page of each version as it is rejected, but keep all rejected versions in a safe place. It may become important later—even years later if there is a lawsuit—to reconstruct what terms were discussed and rejected by the parties.

• Be aware that written negotiations, even by e-mail, can be interpreted as an enforceable contract under some circumstances. All writings, even e-mail messages, should contain a line saying, “For negotiation purposes only.” See Uniform Electronic Transactions Act and Statute of Frauds.

• Letters of intent can be construed as binding contracts. If you want to avoid this, say so in the LOI. If you want the LOI to be a binding contract as to its deal terms, with details to be worked out later, say that. But, the devil is in the details, as they say, so     be prepared to find contract or lease language particulars that become deal breakers. If your LOI is a binding contract, then you may find a court deciding the other contract terms for you.

• Be aware that popular word processing programs may keep track of all changes to a document. If you send that document file to someone else, that person may be able to click a menu item and view all your changes, thereby being able to track your thoughts. If in doubt regarding this feature, click on the Help button for your program and enter “track changes,” “compare documents,” or similar words.

References in periodicals archive ?
Several questions asked by the Kaiser Family Foundation poll followed this formula: "I'm going to read you a list of things some people have said about allowing the federal government to use its buying power to negotiate with drug companies to try to get a lower price for prescription drugs for people on Medicare, and I'd like you to tell me whether you agree or disagree with each of these statements.
Several OECD members, including the United States, did not want to negotiate with developing countries because policymakers feared these countries could not find common ground on the terms of investor rights and responsibilities.
It also emphasizes that even consumers with past credit problems should shop around and negotiate for the best deal.
At times, NTSP also gathered powers of attorney from its physicians, which gave NTSP the legal authority to negotiate non-risk contracts on behalf of those physicians.
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But) according to our attorneys, it would be irregular for two parties to negotiate without certification.
XRAYMEDIA's goal is to become known as the live negotiating clearinghouse for the media industry worldwide, providing outstanding advertising opportunities for everyone to instantly negotiate in real-time, over the Internet, in a private secure environment.
This powerful service has no registration fees or monthly charges media buyers and sellers simply negotiate their best deal and the buyers pay the final negotiated price, regardless of corporate affiliations or budgets.
0 users can now negotiate live for CBS Television Network advertising opportunities.
From New York, and Philadelphia to San Francisco, and Seattle, the LMM enables clients to bring their services to the forefront by allowing users to negotiate in real-time for these hot 30 second avails.
0 users can now negotiate live for ABC Television Network advertising opportunities across the country.